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International Forms New Engine Subsidiary

International Truck and Engine Corp. is placing its engine group in a new wholly owned subsidiary called International Engine Corp.

The new entity will operate as a separate business in order to better showcase the company’s diesel engine technology, particularly as it develops new engines to meet ever-stricter emissions regulations.John R. Horne, Navistar chairman, president and chief executive officer, said the engine group will continue to serve both its OEM customers and the International truck group. "As our engine group has grown from a captive internal supplier to our truck group to a major supplier to Ford and a leader in developing clean, quiet and odorless diesel technology, its sales, earnings and margins have increased dramatically,'' Horne said. ``However, it has been difficult for investors to value this business appropriately because it has been buried within what they generally perceive as a heavy truck business. The creation of a wholly owned subsidiary recognizes the increasingly important role that our cutting edge diesel engine technology plays in the overall success and continued growth of the value of this corporation.''Dan Ustian, president of International Truck and Engine Corp., will be president of the new subsidiary.According to Ustian, the new subsidiary is positioned to leverage product and manufacturing technology globally, moving beyond the traditional commercial truck applications where diesel has been used.Ustian said International developed a new line of high technology, high-performance diesel engines designed to meet stringent emissions regulations and explore new markets. These engines will help International and its customers meet reduced diesel emission standards in advance of the 2004 compliance deadline set by the Environmental Protection Agency.